01.
Executive summary and key findings
02.
Media-for-equity global landscape
03.
Media-for-equity investments
04.
Future outlook

Future outlook

04.
“I truly believe that TV is a powerful medium to help these types of businesses become brand famous and grow to new heights. Whether it's a founder trying to create a new category, build a brand or reach new consumers, I think ITV, with its unrivaled reach, is uniquely placed to help them do that. And from where I'm sitting, it's incredibly rewarding and exciting to be a part of that journey.”
- Sheena Amin, Director ITV AdVentures

The current state of VC and media-for-equity investments

Venture capital investors have historically struggled to mitigate macroeconomic risk. During the internet bubble of the early 2000s, total US VC investment fell by about 42% in just one quarter at the beginning of 2001. By the end of the first quarter of 2003, venture investment had fallen by 85% compared to the first quarter of 2000. Similarly, during the 2008 downturn, total venture investment plunged by 60% in just one year. As a result, investors shifted capital away from ventures toward debt to capture higher payouts (48).

While VC doubled last year, and valuations and investments reached record numbers, a similar doubling occurred just before the end of the dot-com rush. If the same pattern continues today, we will see value destruction within VC.

Founders are being told to grab as much cash as possible, stay low and not make any drastic decisions that may affect their CAPEX in the coming months.

On the other hand, there is an opportunity for founders to re-evaluate their growth strategies and find suitable investment options such as media-for-equity that may not only increase their growth but also help preserve cash and therefore extend their runway.

Naturally, we asked ourselves where media-for-equity can go from here. This whitepaper made it clear that some regions are unaware that media-for-equity exists as an investment model. Through various initiatives, the US is now beginning to adopt it. Over the last three years, countries such as Mexico, Brazil, and the Southeast Asian region have been using the model to secure a revenue stream.
“I think media-for-equity investments are no different from other venture capitalists who look into appropriate due diligence.”
- Neville Taraporewalla, President, Brand Capital International and The Times Group, North America

Looking ahead

We penned out some directions for media-for-equity investments this decade. The model will become increasingly popular, and these points should be taken into consideration when discussing the topic:
01.

The evolution of media and the expectation to see new forms of advertising being used in exchange for equity, such as influencer marketing and digital marketing overall

Given the rising popularity of OTT platforms worldwide, media-for-equity deals will also involve OTT advertising.

Influencer marketing is becoming a trend, with countries such as Spain (through Media Digital Ventures) and the Netherlands (through Influencer Capital) trying it out. Given the power in audience attention of digital creators, influencer marketing will become an important offering in  media-for-equity deals since we can see evidence of global adoption in Spain, the Netherlands, and Brazil.
“Broadcasters are faced with a challenge to adapt and launch their own OTT platforms to keep up with the demand.”
- Hasnain Babrawala, Founder and CEO, Fame Media Global
02.

Changes in the industry, especially in the US

Digital is reconfiguring media legislation in the US, with platforms such as Google, Meta (Facebook), and Amazon getting 70% of the ad spend market in the region, forcing traditional outlets and companies to adapt.

Consolidation is needed for these media groups to keep their audience and migrate them to their OTT platforms.

Optimizing investments through blockchain-enabled smart contracts is meant to efficiently control and spend the budget and open up direct access for advertisers to place ads on the connected TV network, where companies such as MNTN (mountain.com) are pioneering the work.
“Snackable content is New Age Engagement. New Age Engagement is 10 seconds’ engagement and at best 2-3 minutes’ engagement.”
- Sivakumar Sundaram, CEO, Bennett Coleman & Co
03.

Given the current volatility in the tech market, we should expect media-for-equity investments to gain in prominence among startups willing to preserve cash and extend their runway

The CEO of Softbank has publicly admitted cutting funds (Softbank is responsible for 10% of unicorns in India), meaning that a media-for-equity investment can be identified as a viable solution for a market such as India.

The media-for-equity investment model can be very profitable in a new market, such as the USA, so time will show us if it gains prominence in the region.

South America is adopting the model successfully with Brazil and Mexico. Grupo Globo, Brazil’s largest media conglomerate, and TelevisaUnivision, Mexico’s biggest media group, have already influenced the development of six unicorns with this investment model.
“The media-for-equity model is beneficial for startups and companies that were not able to secure venture capital investments and have little or no insight into marketing strategies.”
- Ranganathan Somanathan, Co-founder and Curator, RSquared Global Ventures

Conclusions

The development of new media has led to the decline of old media. Traditional, mainstream media (television, radio, print, and outdoor) are still popular in some countries, such as India. However, globally, these forms of media are slowly declining in popularity as people increasingly turn toward digital forms of entertainment. People consume digital forms of entertainment (social media, over-the-top, video, and streaming platforms) more than ever before. Due to the Covid-19 pandemic, the public has become more accustomed to video content over the last five years.

From a global perspective, media-for-equity is flourishing. The investment model is making its entrance now, after 25+ years of being on the business radar but not given sufficient attention. With investments of tens of millions of dollars and euros (as seen in the case of what3words, Cazoo, Zalando, and others), media-for-equity has slowly but surely become a point of interest for investors and mainstream media groups alike.

If Western Europe has a history of supporting emerging companies with media-for-equity deals, Eastern Europe still has to catch up with the model. The first edition of Bordebridge’s report, “The rise of Media-for-Equity as an alternative investment model,” stated that Eastern Europe is a mature enough business ecosystem for media investments. On the other hand, certain media legislations, infrastructure and limited unsold media inventory made it hard for media-for-equity to be adopted in specific regions, such as The US, the CEE, and Southeast Asia.

The future of media-for-equity is globalization. Globalization is the process of creating or expanding an operation so that it operates in multiple countries. This can include company ownership, product ownership, and even employment. The most significant growth in this space has come from companies that have expanded internationally through TV platforms and other complementary traditional and digital media platforms.

It has already started. What3words is the perfect case study to showcase this. The company received an initial media-for-equity investment from Channel 4 Ventures. Following the release of Borderbridge’s whitepaper, what3words got in touch with Brand Capital International, TelevisaUnivision, Fame Media Global, and German Media Pool VC. They managed to seal two media-for-equity deals to help the company break through the Indian and German markets.

The next stage of development will be the global media-for-equity adoption that will enable and give companies direct access to trade company equity for media and expand their business activities internationally.